Monday, June 15, 2009

Business of Learning

This is a very strange time. While increasing amount of concept work and the pace of change puts a premium on learning, the business of learning faces an incredibly difficult time. In the past few weeks, I've had some really eye-opening conversations about the state of Learning as a Business. It makes me realize that we had really better get moving on thinking about our collective future. There are some important calls to action at the bottom of this post.

Particularly, I'm interested in the question of:

While training as a publisher of courses and courseware faces an increasingly challenging market, what other things can learning businesses successfully sell to internal or external customers?

Troubled Times for Publishers

By way of background for this, I think it's instructive to look at what is happening in parallel industries. Publishing happens to be a pretty close parallel to training. The challenges for publishers has been well documented:

From Terrible to Terrifying: “The stats show that total newspaper ad sales dropped by an unprecedented 28.28% in the first quarter of 2009, a deep plunge that represents a loss of more than $2.6 billion in ad revenue compared year-over-year.”

Newspapers and Thinking the Unthinkable by Clay Shirky "...the core problem publishing solves — the incredible difficulty, complexity, and expense of making something available to the public — has stopped being a problem."

Few believe that newspapers in their current printed form will survive. Newspaper companies are losing advertisers, readers, market value, and, in some cases, their sense of mission at a pace that would have been barely imaginable just four years ago. Bill Keller, the executive editor of the Times, said recently in a speech in London, “At places where editors and publishers gather, the mood these days is funereal. Editors ask one another, ‘How are you?,’ in that sober tone one employs with friends who have just emerged from rehab or a messy divorce.” Keller’s speech appeared on the Web site of its sponsor, the Guardian, under the headline “NOT DEAD YET.”

Great lines - "You guys are like a walking Colonial Williamsburg." At 3:23 - "Give me one thing in there that happened today." The reaction is priceless. "What's black and white and red all over. Your balance sheet."

The editor at the end makes a great point that you don't find a Huffington Post, Drudge over reporting in Iraq. It reminds me a bit of the arguments about the loss of quality as you lose our instructional design and go to cheaper forms of delivery. But that doesn't mean you have a viable business.

State of the Business of Learning

Oh, those poor publishing people. Thank goodness that's not us. FYI that's what publishers thought about the music industry when it when through it's slide. That may be happening right now when we (learning businesses) look at publishing.

I don't think there's much doubt that we are in a very tough period for learning businesses. Take a look at the Masie – Learning Barometer.

Learning budgets are decreasing. Spending on external services are decreasing even more. And learning departments need to do more with fewer resources.

If you are inside a corporate learning department, assuming you still have your job, then you feel this by being more busy. In many ways, that's not a bad feeling compared to either the person who lost their job. Or the people who have seen their learning business crushed by this. Anecdotally times are incredibly tough right now for training vendors. See My business has cracked! for one first person story. But I've talked to training vendors who are down 30 – 60% on their sales in the first quarter. 60% lower sales is a really difficult thing to manage. You have fixed overhead.

Temporary Downturn or Changing Landscape?

While the market is tough right now, there are some people who believe that learning businesses who sell classroom, virtual classroom and courseware training will rebound once the economy rebounds. And maybe within some niches that's true.

I personally believe that traditional training as publishing is on an overall downward trend. I'm certainly not alone. When we asked the Big Question of Workplace Learning in 10 Years – the responses of many experts were that in 10 years there would be significantly shift from classroom to eLearning and virtual classroom, but combined total training dollars spent on traditional formal learning will be less in ten years.

You can certainly argue against this being the case. And probably the best argument comes from the fact that learning needs are greatly increasing. Of course, the crux of the issue is whether those needs are being fulfilled through self-service learning or by formal training. I personally would bet against training as publisher of formal learning in the long-term.

Interestingly, I expected that the stock market – which generally I think of as being forward looking – would show bear this out. In other words, the stocks of public training companies would be down as compared to the market as a whole. Instead, it appears that the stock market considers these companies to be okay bets.

But when I drilled down on one company, Learning Tree, it's quarterly revenue from last year is down from $47M to $30.5M and it's running an operating loss from making $4M. That's a big ouch. And for smaller training businesses, it likely feels more painful than that. I'm not quite sure how the market can be treating them as well as they are.

The statistics behind the collapse of newspaper stocks in 2008 are sobering as New Year’s Eve approaches: GateHouse, down 99.55% in this calendar year McClatchy, down 93.6% Lee Enterprises, down 97.3% Journal Register Co., down 99.58% Media General, down 92.47% Gannett, down 80%

I guess that's why I'm not a stock analyst.

There are pretty important question here to ask about your learning business:

Will there be demand for our training products (classroom, virtual classroom, eLearning)?

Is it generally going to be still growing or are we selling into a market that's contracting?

I always think it's good to go back to customers and what they are willing to pay for as a reality check. Put your customer hat on for a minute. Are you more or less interested today in taking a course on something? Do you remember 10 years ago when going to a five day course seemed great? Do you even consider that anymore?

Okay, I'm leading the witness, but I believe that you will find that most people are less interested in training as a product.

That said, I would still claim that because of the pace of change and the increasing number of concept workers …

There is an ever increasing need for learning.

Future of Learning as a Business

Weird times certainly. There's an increasing need for learning, but a demise of training. I can't say this is really anything new. The writing has been on the wall (or in blogs) for quite a while:

The second half of the 20th Century was arguably the Golden Age of Training. Every corporation worth its salt opened a training department. Xerox Learning, DDI, Forum Corporation, and hundreds of other “instructional systems companies” sprung up. Thousands upon thousands of trainers attended conferences to learn about new approaches like programmed instruction, behavior modeling, roleplay, certification, interactive multimedia, sensitivity training. corporate universities, and Learning Organizations. Training was good; efficient training was better.

The gist: we need to completely rethink training departments and responsibilities from the ground up (both literally and figuratively) and we need to recognize that we are midst of a transition to a new normal.

…

This is similar to a post I wrote called Social Learning Defined where I argued that there were three models at play simultaneously: socializing existing formal models (top-down), the sharing of information “from the trenches” back to management (bottoms-up) and the sharing of best practices and collaborating (side-to-side).

…

All of this should scare the crap out of you if you are in learning.

This Venn Diagram courtesy of What Consumes Me captures the questions pretty well. I'm somewhat focused on the bottom right – what we can be paid to do and figure things out from there. Thus, the challenge I really see around all of this is:

What will internal or external customers pay for that's not traditional training?

In having lots of conversations with heads of training departments, training vendors, and training consultants, it's not at all clear what we should be selling instead.

Sure we know about software and services that go along with things like:

Informal Learning

Social Learning

Toolkits

Resource sites

Books 24x7, Safari

But will people really pay for these things? Training is a known product. These things are not. And you are competing with a perception that there are free/open or public or cheap versions of all of these things. Or that someone can figure it out. Don't I just use SharePoint? If we start using social learning, do they really need anything from the learning department?

As one example of the challenge, Upside Learning (disclosure) who often works for training companies to help them build innovative eLearning Solutions has what they call an Innovation and New Projects Team. This team builds innovative solutions, often in concert with their training company partners, that they believe will help generate business. This is an applied R&D effort with the goal of building out things that customers will ultimately want to buy. That's worthy of a blog post on its own, but this topic raises and interesting question: What should the innovation team be building? Should they spend time building out things that are listed above? The safe bet is for them to build things that are closer to existing eLearning solutions. But that doesn't get us across the chasm.

We seem to be squarely in an Innovators Dilemma. One caution about the above Venn diagram is that it doesn't necessarily imply the disruptive changes that may be required here. Incremental changes, e.g., going from face-to-face in a classroom to virtual classroom or courseware, likely are not going to be sufficient in the long run.

Conclusion

Ending this with these somewhat terrifying questions is probably going to be a little bit unsettling. But I certainly don't claim that I have the answers to this. I've talked with enough VPs of Training and CEOs of Training Companies to know that this is a hard problem that definitely has their attention. And I don't see easy answers.

Maybe just because of my nature, I'm actually still optimistic because there's greater need for learning than ever before. I believe that we are in the learning business – and there must be things we can do. It's part of the reason for Work Literacy and Aggregage. These are small pieces to a larger question.

Calls to Action

I would like to ask you to help me pursue this topic:

1. If you have thoughts on this by all means comment or write a post or engage me in a conversation. It's too important not to discuss.

2. What business models, products, companies do you currently see getting ahead in this? Where should we collectively be looking to understand what's next? What's already selling?

3. I am planning to hold a discussion through Learn Trends around this topic in July. I'm going to bring together people who represent a variety of different perspectives for a frank discussion and exploration of the business of learning.

Learning Department Heads

What can they sell internally that's not training? What will they pay for?

Training Companies, Software Vendors, Services Vendors

What products and services are selling? Where are they going? What are the challenges?

More to come on this. I hope you will find this topic compelling enough to want to participate.

As you know, I'm not in the learning/training business, but am interested in individual and organization learning within organizations large and small. You present your dilemma and questions very clearly, so my question may just be from a lack of understanding on my part of the business. But here is my question:

What is the difference between the "training business" and the "learning business"?

I have some obvious pre-conceptions based on the common usage of the terms "training" and "learning", but like so many things realize those every day definitions don't necessarily translate into their professional usage.

@Brett - I'm not a big definition guy, but I intentionally chose learning because it signals a broader set than training. To me, a training business implies courses and formal instruction. A learning business could be lots of other things.

Of course, a lot of learning businesses really are in the performance business, e.g., more sales, etc.

Your reasoning is consistent with what I was thinking, and the perception that I think most people have of "training", expressed well in this quote from the article you link to, "Get out of the training business":

Training is obsolete because it deals with a past that won’t be repeated.

Though I don't believe that quote to be true across the board in all industries, even the knowledge/concept intensive ones, it is definitely a common feeling.

I'm also not sure I completely agree with tying the success of a learning program directly to performance. Someone who is well prepared obviously has a better chance at performing well, but in the end actual performance in knowledge/concept work has less to do with how well prepared someone is than with how well that person is able to apply that preparation to solving a particular problem. I see it as a bit dangerous to hang the success of a learning program on the performance of individuals or teams, when that performance is ultimately outside the control of the learning program. (To reference a sport analogy yet again, this is exactly how athletic coaches are evaluated - a losing team doesn't mean the team was bad, it means the coach, the chief learning officer, failed to do his job properly and needs to be replaced.)

When I read Brett's comment "I'm also not sure I completely agree with tying the success of a learning program directly to performance" i felt the hair on the back of my neck stand up. This is so contrary to what the industry is saying now. Then I actually thought about it.

When I hear a comment like Brett's I think of tying training to an increase in performance. And so often that is what people mean. But the truth is that in many cases training (or some other learning) is needed for people to just keep up. That makes it very hard to measure. I mean, how can a L&P professional say to his or her boss, "we didn't get any worse this quarter so training must be helping!".

I'm not sure what to do about all this, but it is something new to think about. Thanks.

On the post itself: great work, Tony. Lots to consider here. I agree with Jenise that this is an important conversation. Personally, the changes I've found in our business from, say the mid-1980s until 2000 have been primarily incremental (that might be a post in itself...), but recently the recognition of the importance of informal learning, the notion of concept workers, "social learning" and so forth have made a significant impact on the profession. Now we just have to sort it out and learn to use the "right" combinations at the right times.

I agree that the learning enterprise will change at least somewhat in the future.

To analyze an industry one has to look far beyond current trends. One has to look at structural influences on the industry. So for example, newspapers are dying because Craiglist took their revenues on want ads, people are getting their "news" from the web so advertisers are moving to the web, and a few other revenue-creation problems exist for newspapers.

Not sure what the analogous movements are in the training-and-development field outside of the economic depression most businesses are in.

Will corporations really outsource their training to the web? I doubt it?

Will they really let employees learn only from each other (when that involves a productivity hit on multiple parties and it assumes that most people have good skills as facilitators of learning)? I doubt it.

Will they just stop training people? Hmmmm. Well, this I doubt too but with less certainty.

Long-term business success in our field will not be found in the current madness that infects our field so widely. It will be found by dissecting the structural weaknesses in providing real value---and them meeting those needs sooner and better than anyone else.

@Brett - "I see it as a bit dangerous to hang the success of a learning program on the performance of individuals or teams, when that performance is ultimately outside the control of the learning program."

I agree completely. However, most companies end up selling partial solutions to any problem. Still, you have to know what your customer is buying. If it's sales person performance, then you have to sell sales person performance. And, yes, a partial solution will deliver a partial solution.

@John - I had the same reaction - at first taken aback. Of course, we are talking about performance. But maybe we aren't.

@Will - I'm not claiming that there will be no more training. There are still trains even though that's really not been a great industry to be in for many years. Training is going to be around for a long time. And I actually think there are some awfully important topics like Work Literacy that there should be training initiatives around.

Saying that something will still be around, doesn't mean it's necessarily a good industry.

As you've articulated so clearly we know the following trends are in place:- Training departments budgets are being cut (more with less)- Revenue for publishers continues to decline- The need for learning is actually increasing

Another trends we know is happening is the internet is dramatically cutting the cost for generating and distributing content (thus the issue traditional publishers face). That is going to continue to happen. So learning/training companies that have the cost structure of the old model are going to be in trouble.

So one conclusion is the only way to meet the increasing learning needs with a lower cost structure is through elearning & other technologies. For example training that knows the learning style of the student and can automatically adjust the content to fit that style. I think we'll see disruptive technologies like this. Incidentally, this is the same conclusion the author of Innovators Dilemma came to in his latest book on disruptive technology for education (I highly recommend his book 'Disrupting Class').

As these tools/tech get better I think we'll start seeing companies give training budgets directly to employees (power to the people) as they will be better able to meet their own learning needs as opposed to going through a central training department.

I agree that there are tons of free learning resources out on the web. However, I think there will be a market for people who will pay for great learning content (think about HBO and the content they create). Learning consumers won't pay thousands of dollars for a 5 day training class...but I think they will pay for a learning tool that knows their learning style and can allow them to learn with other and on their own time.

Changing business models seems very difficult for established companies, especially since the new model is not yet established and well known. In the music business example, cost should have come way down and efficiency should have goon way up, but revenue in new business models was not sure and internet distribution and marketing would require strange new skills and knowledge sets. I also suspected that many business are capitalized in ways that precludes the possibility of getting smaller. Maybe the only choice for established companies is grow or go bankrupt and we're just waiting for new start-up to hit the scene.My own take on workforce learning is that it needs to be contextualized and individualized in ways that courses and content (on their own) are not really optimized to achieve. Is this true and if so, would it be another example of a strange new skill and knowledge set?

The 'business of training' and the 'business of learning' are both misnomers. As both areas tend to be conceptualized by practitioners, they involve the sale of services to organizations to (indirectly) help them perform better.

That indirect linkage is the problem. In a crushing economic environment, only the direct, immediate, money-generating activities are likely to survive.

So, I would reframe the question to ask:

How can the skills of people who have been selling training and learning and knowledge development services be applied to create direct value-added for an organization's customers?

To me, there is a clear and obvious answer. The 'Lean and Six Sigma' movement has exactly that direct linkage in many managers' eyes. Executives can see how cutting cycle time, eliminating defects, speeding innovation, and reducing inventory will help them survive - short and long term.

As someone who has worked and taught in both the learning and operations communities, I see some obvious opportunities for training and learning professionals to support Lean processes.

Making that shift, however, will take a concerted and serious effort on the part of the training/learning practitioner community - and people generally don't like taking that sort of risk when they are under duress. They are more likely to just work a lot harder to fight for the diminishing scraps that remain in their familiar bowl.

Learning (be it formal, informal, and/or social) is rapidly shifting to a continuous, flat, inclusive and open environment/process.

Yesterday's training department (and that of the training vendors and content suppliers) are mired in the exact hierarchical structure that is found within the overarching organizations we serve.

The training department needs to become the ambassador of 'Collaboration & Learning'. Only then will they be able to become relevant again, whilst not only saving money, but improving productivity ... all the while connecting the rampant silos.

One thing I'll add after reading through the comments (and this is something I brought up in my post as well), I'm not sure that the primary market for our products and services is going to be companies and organizations. As Will said, we need to look at the structural pressures on the industry and I'm beginning to believe that we're seeing a definite and permanent move away from companies being the "providers" of learning. I could be wrong, but if I'm right, then I think that fundamentally changes the conversation we're having.

When I read your words... "There's an increasing need for learning, but a demise of training." I'm reminded of a prediction offered by Dr. Jonathon Levy of Harvard Business School Publications (in 2001 on a webinar - State of Learning on the Global Web). He predicted that in 5 to 7 years up to 85% of our learning [not training!] would take place in the context of our jobs.

Earlier you coined a phrase "work concept" that is similar. Dr. Levy's prediction was on the money, but I'm not convinced we've shifted our "training" paradigm to embrace the concept of Continuous Learning - or - executing our craft in a Continuous Learning Environment.

Truth is the "environment" is the environment of work - call it context or concept of work; either one works. The point as learning professionals, our job focused has shifted even if we have not. Our deliverable now is ensuring the right knowledge worker has access seamless, frictionless and ubiquitous access to the right learning assets at the right time, in the right amount, in the right format, and to/from the right devices. No small task - and training ain't the solution! And traditional ISD ain't the approach - though neither are wrong or "dead", they're just a smaller fish in a bigger pond.

One of your readers professed performance was the all important link to learning outcomes. I partially agree, but it's bigger than that. I think our target needs to be creation of a "sustained capability". And our jobs is to sell "sustained capability" as our product. Again...that ain't training - at least not by itself.

I sat on a panel at Eliott Masie's Learning 2008 last October with several other experts, one by the name of Dave Foglemasn, CLO of Sprint University, and he coined a phrase "Performer Support". Not performance support (a.k.a. job aids, etc) but a mindset of thinking about what a knowledge worker needs in order to performer. Training is a part of that - always will be, but it's shrinking.

Bob Mosher & Dr. Conrad Gottfredson, LearningGuide were the moderators on this panel and have something called the Five Moments of Learning Need that define our learning environment. those five moments define the spectrum of learning opportunities that we must embrace as authors of learning. Simply, the moment include 1. learning something new - 2. Learn more of something - 3. Try to remember something - 4. Adjust behavior when something changes - 5. What to do when something breaks/goes wrong.

As hard as I've tried, I cannot think of a 6th moment. But the point is, our discovery approach must expand beyond the "A" in ADDIE to include the work context versus a limited scope of ferreting out requirements for knowledge and skills alone.

Point is...training is not dead. ADDIE has not outlived its usefulness, it’s US - WE have not changed to keep pace with the high velocity of the work context. If push came to shove, I might even consider purchasing a EPSS over an LMS for the very reason that up to 85% of our learning takes place in the context of our jobs - and that ain't happenin’ in the classroom and it ain't working to shift it all to e-learning. It’s Learning Blend 2.0 that integrates formal/informal training, social/collaboration and all the other 2.0s we create. “WE” have a new set of competencies as learning professionals to become workplace learning & performance consultants to define learning moments in a continuous learning environment

Sorry, a bit too much Starbucks this morning. I'll send you the link to the white paper on this topic when it's published. And I'd love to be part of the gang you gather to discuss this further.

@Faraz - great addl point about the trends. Not sure that I agree that "Disrupting Class" exactly matches the workplace though. Part of the assumption around training is that there are common learning needs. As work moves towards concept work, learning needs become fragmented. It also becomes fast. Not sure that learning businesses can be in front as publishers.

I'm intrigued by the comment - "we'll start seeing companies give training budgets directly to employees" - do you have anything to back that up with? It sounds somewhat reasonable, but I've not really seen it so far.

@Howard - that's exactly it - most concept workers are learning all the time, but it's very specific to the particulars of their work. There still needs to be foundational learning going on, but that's likely contextual as well.

@Vic - Great point - Learning businesses really need to be results focused businesses if they are going to play a significant role. Lean is but one example of the kinds of results they can focus on. And traditional training solutions are only part of the answer. I wonder if going to a broader mix of solution is a requirement?

@DP - I disagree that Training is Dead. But its pretty clear its not a growth industry. And likely its on a slide.

"Ambassador of Collaboration & Learning" sounds really nice, but will anyone pay for that? What do they get for it? That's a big part of the problem.

@Michele - Fantastic post! You are also saying selling to individuals - same question from me - is there something to back that up?

@Gary - wow! Well said. "Our deliverable now is ensuring the right knowledge worker has access seamless, frictionless and ubiquitous access to the right learning assets at the right time, in the right amount, in the right format, and to/from the right devices." ... "sustained capability" ... "Performer Support" ... very good.

@Tony:Agree that learning needs will become fragmented & fast as a result of moving to concept work. This is why technology & tools will evolve to meet the variety of needs and in a manner that is convenient to the learner. The model of classroom & live training is just not scalable for this new training demanded by concept work. I think this is similar to what you are saying.

Re; budget going to individuals. No, I don't have any direct data in the learning space...it's only a hypothesis at this point. However, there are a couple data points we can look at that might be instructive. Firstly, we know companies are moving away from live instructor training and towards self-study elearning solutions (my former employer is doing this) mostly for cost reasons. I see the move towards individuals as a continuation of the same trend - cost decreases, learners have more control. Yes, I know this may be extrapolating this trend a bit far!

Secondly, lets look at the music business. As consumers were given more tools and 'filters' to discover their own music, there is less and less need for a large record company to do the discovering and filtering. Consumers can build a relationship directly with artists. As learning tools and filters evolve, individuals will be able to select the training that works for them.

You say that classroom and facilitated learning(I assume you mean online) is not scalable, which is certainly true to some extent.

However, for some topics and some learners, having human connection is critical. For example: training that supports an organization's strategic initiative may require people to see and feel an executive's passion, be able to ask questions, be able to sit at a table with other "learner" to hash out action plans, etc.

Learning to performance requires four essential ingredients, not all of which come down to the cognitive aspects of learning:1. Learners are interested and engaged in the learning.2. Learner learn to understand the key concepts.3. Learner is provided with supports that enable remembering in the future.4. Learner is inspired to want to put this into practice in their future work situation (motivation for performance).

While I don't doubt that all 4 can be provided in a scalable package, with some learners and some content face-to-face interactions provide benefits.

And to compromise, we can always keep costs down by doing a little face-to-face stuff and a lot of scalable stuff.

The selling of "learning products" to individuals makes sense. After all, learning is a very personal and individual activity and, to use an old phrase, people will only get out of the experience what they put into it. Though you can force someone to attend training or complete a "learning activity", you can't "make" someone learn.

Tony, this is partly why the idea of a coach, a "personal knowledge trainer" if you will, is something that stays toward the front of my brain. I like Gary's idea of "performer support", as it seems to follow the same general idea.

The selling of "learning products" to individuals may make sense, but I doubt this will work in the real world. How many of us have struggled to get our managers to agree to send us to a conference? I just don't see our corporations handing over their $60,000,000,000 training budget (supposed U.S. training expenditures per year) to their employees to spend willy-nilly. If there is a bias against it now (as evidenced in the difficulty one has to go through to get approval to take university courses or go to a conference), what will make corporations all of a sudden be willing to hand authority to the learners? Okay, so they'll hand it over to the learners managers? Hmmmm. So how will we train learners' managers to make thoughtful learning decisions? Maybe that's the growth industry we're all hoping for--training managers how to be learning leaders without sucking up too much of their important productive time(SMILE).Bottom line: I just can't imagine that budget will be handed over to employees to craft their own learning curriculums. Okay, I do see one scenario where selling to learners will occur. If organizations completely forsake their obligation to support their employees in development, a motivated subsection of employees will look to develop themselves (more than do now). This however, will not, I think, be the growth industry we dream of.

I have to say that my take on the trends is that, as Will said, businesses are making it clear that they feel little obligation to develop their employees (with some exceptions, I know). Development is often seen as a cost, not an investment. We're also competing against a lot of skilled, educated people in a global economy--people who are willing to finance their own learning or who have governments that will finance it for them. Maybe I'm being pessimistic about this, but I just don't see companies feeling responsible for training. Performance support, yes, but training, no.

And let me just say that I was SUPPOSED to be working on a major project this morning, but I got really caught up in this question and had to follow my thinking. Now I have to catch up! :-)

I posted this comment on Michele's blog and thought it would be worthwhile to cross-post it here as part of the conversation:- - -- --- -----You write: "I also think there's a general reluctance to train staff because knowledge and skills are portable and with people having the flexibility to move to other jobs, companies are understandably reluctant to train their future competitors."

Perhaps we are approaching a point in time where companies need to accept that this is going to happen and stop trying to avoid it. Using the music industry example, it's like the record companies trying to ignore the impact of digital technologies and the network. Those who understood the disruption to come, and made the leap, had a head start on the rest - most of whom are still trying to catch up.

Back to a sports analogy: most pro teams know that their star players, maybe all of their players, will eventually move on to other teams, either as a free agent or as a trade. This doesn't stop them from trying to make sure these athletes are the best trained and prepared athletes on the field.

Not sure how exactly these examples can be leveraged to answer the question at hand, I just thought they might help shed a different perspective on the challenges ahead.

I created this chart a while back that shows the dollars spent on training as reported by Training Magazine. What's interesting was that it was rising up until 9/11 and then like the rest of the economy it went down. Perhaps the more interesting part is that it has yet to recover to its pre-9/11 status. It looked as if it was going to do so this time around, but with the present economy, that looks quite doubtful.

It almost seems as if once learning and development budgets were cut, organizations saw no need to bring them back to pre-9/11 levels... or perhaps we simply got way more effective and efficient.

It will be interesting to see how much it goes down this time around and how long it takes to recover. However, what I have noticed is that it does not seem to have taken as big as a dive as the 9/11 aftermath (at least from the anecdotal evidence I'm hearing).

While training will never die unless we eliminate all processes, procedures, and the need to perform them correctly, the need to support other forms of learning will almost never rise unless we show a real benefit for investing the money.

@Donald - that chart is really interesting and not something I believe I've seen before. The downturn appears to be more the 2000 dotcom bubble burst than 9/11. Did you publish this anywhere? Why isn't this more known?

Tony, the only place I have published it is on my website. I'm not sure why its not more well know -- its comes from their "State of the Industry" issues that are published in Oct if I remember correctly; and normally you can get the main numbers on their web site shortly after it is published.

When I spoke about Lean, I really wanted to share an insight with the training community that is a tough one to explain. Let me take another stab at it.

The core mechanism in lean is something called standard work. Put simply, this is the ability to make sure that a job is done the same way (presumably the best way) every time that it is performed. If you know exactly how a task will be performed every time it is done, then and only then can you design a production system that exhibits optimal performance.

To date, standard work is typically achieved when work content is well-defined and reasonably stable. Manufacturing assembly, pharmacy operations, etc. are all tasks that can be pinned down, documented and taught to workers as standard work. The signature documents for standard work are the SOP and the job aid.

As we transition to a knowledge economy, we would like to have lean production benefits from more flexible and fluid business processes. But that makes the tasks harder to pin down. It is hard to write an effective SOP for a task whose actions are predicated on "it depends".

If you can't standardize the task, the logical next step is to try to standardize the training for doing that task. Even if the task requirements differ, the outcome will be more predictable if you know exactly how a well-trained person is likely to react to different situations.

As emerging tasks become yet more fluid and unstructured, even standardizing training will be insufficient. Then, the only way we can achieve meaningfully consistent task outcomes and performance is to ensure that practitioners are educated to a known standard. We may not know exactly what they will do, but they will apply known and consistent principles to figuring it out.

In other words, as we struggle to apply lean to ever more sophisticated processes, we need a richer set of approaches to achieving standard work. We need to apply a logical progression of methods:

1. Standard procedure + SOP

2. Standard outputs + standardized training to deliver them.

3. Standard goals + education on standard principles to achieve them.

I may be all wet, but I believe strongly that Lean cannot extend much beyond the plant floor unless training and education are full and equal partners to supply the consistency that inherently inconsistent processes demand. The only way that anyone could predict future behavior is by knowing exactly what the workers know and how they have been taught to react.

Some of our high risk industries understand this well. One example was Sully Sullenberger's skill at landing his plain on the Hudson River. Since he's an expert consultant on safety, I'm sure he would credit his thorough training more than his heroism. Indeed, one would hope that every airline pilot is trained to do something very similar under comparable circumstances.

If you think about it, the act of flying an airliner from point a to point b is now a pretty lean process. There's not a lot of confusion, inconsistency, or wasted motion.

Bottom line: Once you get past the trivial case of writing work instructions for assembly workers,Lean and training become logically inseparable.

If I am right and this point could be understood and articulated more effectively, there will always be tons of jobs for training and education professionals.

"Lean and training" are inseparable ... great point. And similar to my statement that "work and learning are inseparable" for the concept worker. But I like that you've taken it to the broader context of lean.

Training departments need to refocus their efforts, and become the business change agent of both learning & collaboration. (ie. you can't have learning without collaboration, and you can't really collaborate without learning, be it directly, or indirectly)

1) Will they pay for it? - from an internal perspective, the learning org must make the business case for owning (and/or being a part of) the merging of culture and technology to ensure a Work 2.0 world. It's not about paying for it, per se, it's about proving the validity of the relationship between learning and collaboration.

Vendors too need to rethink their business model. They need to come to the table with formal, informal and social options - not just formal ILT, bums in seats, approaches. If they do switch their model, then guys like me will in fact pay for it.

2)What do they get for it? - if the 'they' you refer to is the organization, then, 'they' get an organization that is the willing ambassador of the Work 2.0 culture (a la Hamel and/or Malone) intertwined with the tools/technologies to drive the formal-informal-social tenets I speak of.

The new 'Learning & Collaboration' organization can then speak on behalf of the business as the agents of change towards the Work 2.0 mantra.

Donald, I like your chart, and I'd like to comment on it, but first let me say that I'm skeptical about the quality of the data-gathering for Training Magazine, ASTD, and other such industry research compilers.

But let me assume that the data is valid and true. Here's my comment on the chart. Yes, it shows ups and downs, from about $50b to $62b, so we can look and say "OH NO spending is way down." OR we can say, "OH YES, spending never goes below $50b so there will always be money there for my business (as long as I'm not too incompetent or unlucky).

I don't understand why a subscription service model wouldn't work for training. Where I am, knowledge is moving too fast - and to be successful in your job you have to be able to learn fast. But there is also a tidal wave of information on topics related to the job tasks. Its hard to focus in on the information you need for your job. I think that's where we could step in.

What if the training dept created core learning modules that were enhanced and updated by a learning community as the information changed? What if the training dept provided a road map of the most useful and relevant information needed to get up to speed on a required topic? If this all existed within a community, couldn't you charge for this service?

@dp - "If they do switch their model, then guys like me will in fact pay for it." - What do you think that looks like? Is it a Mzinga type solution? Or services or both? Any sense of what you think you will be buying?

You probably know from my writing here and at Work Literacy that I'm a big proponent of what you are talking about - but I also have seen how hard this is to sell internally and externally. So, definitely looking for help creating "The new 'Learning & Collaboration' organization can then speak on behalf of the business as the agents of change towards the Work 2.0 mantra."

@Catherine - great post. "Our challenge as learning professionals trying to find our place in this “new normal” is to be able to articulate why a company needs experts like us to help create a learning environment that everyone seems to be convinced will rise up of its own accord if we just get out of the way. I agree completely that people will routinely access the internet, intranet, shared workspaces, and accessible colleagues (live or online) to satisfy urgent learning needs. But I’m not entirely convinced that they always get what they need, and I am pretty certain that many folks don’t know how to do that efficiently (or don’t have the tools to do it efficiently). And I don’t think that this kind of just in time learning is the only form of learning they need."

And I believe that selling this as a vendor and selling this internally is a tough sale. What am I getting? What does it do? How much does it cost? Will people use it? This is so much more complicated than selling a course (elearning or classroom), more complicated than selling a tool.

Part of what you've said reinforces the need for skill building which we are equipped to do. Part of it is quite a bit more of a stretch.

Tony, a fantastic and provocative post. I see this from a different framework. You mention "once the economy rebounds." This implies we are going through the usual cycle of ups and downs.

I don't see it that way at all. We are experiencing a fundamental reset of the economy and of how business transpires. The Industrial Age is being replaced by the Network Era. It may be a bigger shift than the transition from Agriculture to Industry.

So... from hunter/gatherer to farmer/cultivator. Then from manual labor to machine. Now from individual to connected intelligence. Farms and machines will continue to exist, of course, but networks will become the predominant source of value and progress.

My colleagues at togetherLearn and I have been in active conversation this week about whether learning has outlived its usefulness as a term. This morning at the IADIS Conference on eLearning in southern Portugal, I outlined a new approach. Unlike most four-step models of learning, it incorporates learning with others and/or the option of performance support. I haven't been able to spit the words out fast enough, but I imagine discussions will begin popping up on togetherlearn.com in the near future.

You point out that the need for learning is increasing as our world becomes more complex. Let's be cautious with that one. The fact that there's more news isn't buoying up the papers, is it? That Jon Stewart clip is amazing; thanks for the pointer.

I look forward to continuing this discussion. Thanks for being our industry's catalyst once again.

I'm almost sure the numbers are not adjusted for inflation; however, inflation has been low the past few years. Since the majority of a training/learning budget is for salaries, the best indicator to compare it with is probably the Employment Cost Index which has only been rising around 2-3% the last couple of years where as training budgets rose 6-7%.

I agree with you that the total numbers are probably way off. For example ASTD reports way higher numbers that have hovered around the 100 billion dollar mark the last few years, mostly because of different methods. I think it would be almost impossible for organizations like ASTD or Training Magazine to capture the real numbers (the cost is simply too high -- perhaps they should join forces). But I believe what they do capture are trends or the "health" of the industry as their methods have been fairly consistent throughout the years. That is, when you compare their reports to the rest of the economy, they show consistent patterns, thus the patterns matter more than the numbers.

I thought what was perhaps the most interesting part of the reported numbers was that the last report by Training Magazine in which they noticed a drop in expenditures -- it went from two years of 7% annual growth down to 6%. It almost as if it was one of the first indicators that something was wrong with the economy. I tend to agree with Laurie Bassi's research that training investments are positively linked to an organization's performance -- those that spend more on training are likely to outperform other firms in subsequent years.

Good organizations seem to get the fact that training and learning platforms are vital to their health, but we consistently shoot ourselves in the foot by failing to link our processes and platforms to real business needs, thus at the first signs of trouble our budgets are lowered; thus it will be interesting to see what the patterns in their reports show over the next couple of years.

I think inflation must be taken in to account if we consider compounding effects. If inflation is at 2% annually for 10 years, a $60b amount of investment in training becomes a $49.1 billion investment (if I'm using a compounding calculator correctly). That's a big difference!!

My problem with the industry research goes further than the incredible (thanks for pointing this out) discrepancy between Training Mag and ASTD numbers. It's that they don't even try to use the same sample year to year. It's hideous stuff really.

Laurie Bassi's research, if I read it correctly years ago when I looked at it, suffers from a methodological problem. That strain of research tries to show that companies that spend more on training get better financial results. They try to control for the correlation-is-not-causation problem by looking at say 2002 training investment and then 2003 business results. They claim that this shows the training results impacts the business results. But that is a bogus control. Companies tend to do well in cycles that span years of time. Bottom line is that it is just as likely that a company doing well in 2003 was probably doing pretty well in 2002 too so they had money to make more training investments. So for example, doing well financially (in 2000 and 2001) actually causes the heightened expenditures in training in 2001 AND it causes the company to continue to do well in 2002, 2003, etc. It is NOT that more training in 2002 caused the better results in 2003.

A lot to absorb - I will have to come back and read more carefully and I apologize if my skimming has caused me to miss some fundamental framing that makes these comments useless/nonsensical/etc. BUT:

A fundamental framework for me is a 2x2 of tacit vs. explicit knowledge, and know-how vs. know-what. Explicit know what is INFORMATION, which is increasingly available and searchable. Explicit know-how is PROCEDURES and implicit know-how is SKILLS, and I've often thought of them as the focus of training. I understand the potential for those in the business of learning to panic as training becomes possible on the internet. I think ALL of us need to pay attention as automated expert systems become increasingly capable of carrying out procedures and even exercising skills where no formal procedures exist.

Tacit know-what is PROFESSIONAL JUDGMENT, and this is the stuff that continues to have economic value. Any "business of learning" that can demonstrably improve or extend professional judgment will attract customers. One opportunity that will remain important is the translation of PROFESSIONAL JUDGMENT into INFORMATION and SKILLS and ultimately into PROCEDURES - on some level a "trainer" does this anytime he or she builds curriculum and/or instructional materials. Another opportunity is to assist in the process of automating information, skills, and procedures. Trainers presumably have acquired professional judgment about all of this and the many ways humans can respond to knowledge and the systems that produce, deliver, and/or consume it. That "subject matter expertise" can be valuable to the people building the expert systems that will replace so much of the work people do now.

And I'm not a "robots will replace us" Singularity wacko - I think some form of the Singularity is coming in my lifetime but I think whether the result is largely good or bad depends on our political and social responses. When we went from being almost entirely farmers to having almost no farmers we replaced all that economic activity with new and fulfilling forms, and I think we can figure out how to do that again.

In the meantime, it is worth trying to figure out how to focus the business of learning on developing "professional judgment," transforming professional judgement into informaton and skills and procedures, helping build virtual learning systems for "teaching" all that, and helping build "expert systems" that ultimately make all that obsolete.

I will read more thoroughly this thought-provoking collection of thoughts and links.

I'm not sure if I am correctly interpreting your last comment on inflation. If a company increases its budget on training by 6% annually and inflation is running at 2% then then that shows a true upward growth in spending, not a downward trend. What does the "10 years compounding calculation" have to do with an annual budget (unless maybe they borrowed the money for that budget over a ten year period)?

As far as the discrepancy between ASTD and Training Magazine, yes their sampling differs from each other, but that does not mean they use different sampling methods from year to year. In fact, if they did, then their reports would in all probability miss the trends that they show -- the numbers would simply be all over the place. When you compare the chart to real world happenings, they coincide. Thus its the patterns that are the most important and reliable.

Even Bassi admits that the direction of causality is hard to prove, particularly in her case, thus she uses several methods (none of them actually prove it, but it they do tend to show a direct). At least she tries to show something (perhaps controversial and in quite an unexpected manner) rather than doing something like pulling a rhetorical question out of a magazine and passing it off research that shows only 10% of training is transfered to the job :-). Thus just like the industrial reports, you have to look to look at other indicators to see if it aligns with other indicators... of course we all tend to look at organizations somewhat differently...

Donald, my thought on compounding was this. If the training magazine numbers are not adjusted for inflation, then $60b in 1995 and $60b in 2005 would not be equal investments as the 2005 amount would really be a $49b investment in 1995 dollars. So while your chart shows a pattern that is mostly a straight line (with some undulations over a period of years btw 50 and 62b), in amounts that are adjusted for inflation the trend for the whole period would be down in inflation-adjusted dollars.

Donald, And come to think of it, the numbers depicted in total amount of training expenditures aren't really that meaningful without knowing the total amount spent. Is this amount 10% of the total budget or .0001? This is still related to the inflation issue.

BUT ALSO, there is non-monetary inflation to factor in as well. There are the number of employees served. I'm guessing that over a ten-year period there are bound to be more people in the workforce. Isn't the population still growing? So $60b spent on 100 million workers is not the same thing as $60b spent on 150 million workers.

Duh! Now it makes sense. So I would venture to say that it has not kept up with inflation. When training really peaked (along with a lot of other things) was the height of the dotcom bubble because it was coupled with the need for new systems and processes (that need training) to fix the Y2K problem. And of course the problem was fixed and the bubble burst. So after thinking about it, the chart shows that we were near the 1999 level of spending in 2007 and perhaps well on our way to matching it except we ran into our present economic woes; however, the spending levels are more than likely down because of inflation.

But, I do not think they are down as much as you calculated because of a couple factors: 1) the biggest cost they report is salaries, which as I noted before has to be pegged to the ECI, not inflation 2) elearning and the use of other technologies has increased that are way more efficient (more bang for your buck); 3) we do more "just good enough" through the use of just-in-time techniques rather than trying to be perfect; and 4) we simply are expected to do more today than we were ten years ago.

Again, I believe the pattern in the graph is fairly accurate because they have the data gather techniques down correctly but the model it is based on simply cannot accurately portray the complexity and diversity of organizations coupled with inflation, population growth, and a number of other factors. It might be somewhat comparable to the National Weather Service where they can gather the data and see the patterns, but then they have to plug it into three different models and then use human expertise when the models differ to choose which one is giving them the correct picture.

Personally, I think that the burden of training, and of having the right knowledge for each task that arises, is the problem. The world has become too complex, changes too rapidly, and often requires innovative responses to unforeseeable problems to have training in a set of procedures or memorizing specific knowledge be the answer. Instead, the burden of knowing will shift to the individual, or to a group of individuals working collaboratively, to come up with answers as needed and "on the fly". In other words, the knowledge that is normally made available to workers in training will remain in external databases or other artifacts, to be used as needed. The key skills needed will be do quickly do research and come up with mashed up solutions from the information in the external environment. To repeat a quote I heard a couple of days ago, "The world is its own memory". Instead of training, we need to know how to access it quickly and efficiently.

The shift really needs to be away from training and towards learning. Learning in real-time, on-the-job, at the moment of need. Organizations (and training depts.) really need to think about how to become a learning organization and how to help the organization learn from one another. This is not new concepts, Senge has been talking about it for awhile. My company has been helping organizations become learning organizations for awhile. It's not easy! It does require commitment from the top! However the changes we've been able to accomplish has dramatically changed the trianing dept to focus on performance, instead of how many courses did we deliver last month? and to how many users? As the shift has occurred the realization that

The nature of learning as a business is changing, for good, quietly, incrementally, and fundamentally.

Whether we like it or not, and as long as learning or training is an expense paid for by organizations, there will always be formal training (which many suggest is obsolete/dead). Furthermore, informal learning will have to always impact work one way or another.

Looking for learning impacts to the business is a necessary evil due to the fiduciary responsibilities of companies in investing money on anything. Now the hyper learners want to believe that learning is always self-driven-self-organizing, but may be the hyper learners, are only a small fraction of the worker base. The hyper learners are just the noisy bunch of people (smile). But our other colleagues in the work force(the quite learners) are dominant in numbers. (I do not have stats on this). I have the suspicion that we are hearing a lot of noise from hyper learners and neglecting the majority quite participants (trainers, trainees, IDs, SMEs, anyone who must train in formal training).

Now having said that, I ask myself these questions and would love to hear your thoughts on:

1. What changes are now occurring in training (formal) and informal which are irreversible?

2. What are the significant cost savings, efficiency value adds of the irreversible changes to the organizations?

3. What innovations or forces that cause the above?

4. What changes affecting hyper learners and quite participants?

5. What can we learn from these questions to guide the future of business in learning?

I am really more concerned about the majority quite participants (the hyper learners seem to know it all - smile, they are probably the least of our worries).

The quite participants have more buying power, control establishment, and keepers of training/learning traditions. We should study them.

I appreciate your post, however I am having trouble seeing the parallel between news and learning, beyond simply the downturn in the market place as a whole. Most industries, almost all, have seen significant decline in sales this past year. Learning businesses are not different, much to my dismay, as I feel that a market such as this is when education should be turned up.

In fact, I see it as the opposite of the newspaper industry..Newspapers are being made obsolete by way of digital means. I believe most agree, including yourself, that elearning is pushing out formal classroom training, thus wouldn't that be to our advantage. Also, given that more and more people have the ability to be online, wouldn't that increase our market share, overall?

Tony, I think that is a good analogy for what bad training is but a very poor analogy for what training actually is. Being both a learning designer and trainer, that definition only encompasses a small portion of what I do, mostly when I'm creating a PSS or EPSS where people only need the right information at the right time. Newspapers and most other publishers don't care if you gain any skills from their content or how you will actually use the content in real life. It's sort of like comparing a reporter with a medical technician -- both dig for information and then pass it along to others.

Donald - you lost me on that comment. When I look at the majority of what people do when they are doing course design - a fair bit of it as similar to journalists - but with different goals. Yes, the start and end (Analysis, Evaluation) are quite different. Maybe I'm missing what you are saying.

Tony, I do not consider the training that I create and/or deliver as being anything near to what newspapers publish. Since we agree that the start and end (analysis & evaluation) are quite different then lets discuss the middle:

The design of training is for effect, specifically for a change in performance, thus you have to consider "skills". The design of newspapers is for information, which means they do not care if you perform any differently after you read the news, thus they do not have to consider the concept of "skills".

Since training is designed to effect performance, then activities and interactions need to be created to aid in the development of skills. Very few news articles include these interactions or activities for the development of skills.

As far as implementation or delivery, once newspapers have delivered the news to you (paper version), they don't care if you read it or not because they did not design for effect. With electronic versions they do hope for interaction (they want you to click on their advertisements), but that is about the extent of it. Of course since newspaper organizations are compose of professionals I'm quite sure they also hope the readers find their content interesting and enjoyable enough to read.

When I deliver training it only has to "interesting" in a manner that they know they will be expected to perform differently after experiencing the learning process. Being a professional I also hope the learners have an interesting and enjoyable experience, but that is not my primary concern.

Thus, when newspapers and trainers seek out SMEs or expert performers they do so for entirely different reasons; one seeks out news and interesting content, while the others seeks out knowledge and skills. The two also differ in the "interest" they are trying to provide; one seeks to hold the interest of the individual with interesting content, while the other seeks to improve performance.

* Once we look at the role of learning and real performance improvement with business results, it does become something different than publishing.

* A lot of learning professionals end up being put into a publishing box where their role is to create content. Yes, it has a different goal - but many of the pressures facing newspapers apply to this context.

This is especially true once you hit the edges of where training can economically be applied as part of a solution.

Tony - I agree with you that we are publishers, to some extend, but I do not believe that that is the reason why news papers are failing. From where I stand, the reason they are failing is because of the WAY they publish. Their are other mediums (blogs, twitter, etc.) where anyone can publish what they want for virtually nothing and readers can read for virtually nothing.

As you are probably aware, there are plenty of publishers out there (Huffington Post, Mashable, Lifehacker...) that have embraced the technology that has allowed them to compete. Had newspapers done the same, they might not be in the situation they are in now.

Back to elearning.

You, me, and the rest of us have and continue to use the afore mentioned technology to our benefit. People will always need training. Wise people, the world over, will continue to want to learn and grow. Who will they turn to?

Providers of solid tools will be an asset no matter what. The medium may continue to evolve, but if can as well, we'll be just fine.

I think there is no real medicine against "Sick Sigma" but to educate people to live the "lean" philosophy.The heavier task might be to educate the management, as they just look at the $$$ and Lean focuses on the (really) long term and can't be done overnight.People expect too much to be done in a too short time. And if there is only "little" success, enthusiasm and motivation go down. We can't let that happen, so we have to work hard to find ways to motivate!lean manufacturing training

About Me

Dr. Tony Karrer works as a part-time CTO for startups and midsize software companies - helping them get product out the door and turn around technology issues. He is considered one of the top technologists in eLearning and is known for working with numerous startups including being the original CTO for eHarmony for its first four years. Dr. Karrer taught Computer Science for eleven years. He has also worked on projects for many Fortune 500 companies including Credit
Suisse, Royal Bank of Canada, Citibank, Lexus, Microsoft, Nissan,
Universal, IBM, Hewlett-Packard, Sun Microsystems, Fidelity
Investments, Symbol Technologies and SHL Systemhouse. Dr. Karrer was
valedictorian at Loyola Marymount University, attended the University
of Southern California as a Tau Beta Pi fellow, one of the top 30
engineers in the nation, and received a M.S. and Ph.D. in Computer
Science. He is a frequent speaker at industry and academic events.